Donor Due Diligence Best Practices in 2023

A guide for charities, universities, and nonprofit organisations
Sustaining a reliable and dedicated group of donors is a central goal of any nonprofit. Understanding your donors is critical to nurturing those relationships. It’s also crucial to ensure that your relationship with a donor does not risk damaging your organisation’s reputation, and its relationship with other donors and prospects.
Oversights in third-party donor due diligence pose risks for nonprofits that rely on generosity and reputation. These organisations need an optimised approach to donor due diligence that goes beyond using traditional resources and methods. Fortunately, however, the growth of publicly available online data has led to improvements in due diligence methods that can ensure greater growth and safety.
This guide explains some donor due diligence best practices, which will help your organisation protect its reputation and sustain positive donor relationships.
1. Expand your sources of information
Traditional donor due diligence processes have long made use of publicly available data, but the online boom has dramatically increased the amount of sources and data to sift through. Nonprofits with limited time and resources are often unable to utilise and accurately analyse the full extent of information available, in spite of best efforts.
A common mistake is assuming that basic search engines are comprehensive enough for the research stages of due diligence. These can actually be counterproductive. Due to these engines prioritising SERP and SEO reach, their results can’t always be relied upon. Even with a wide array of search results pages to go through, many still recommend stopping research anywhere between pages two and ten of Google. The fact that non-indexed content is entirely irretrievable through these kinds of searches adds to a limited scope that can enable bad actors to hide misdeeds online. This is worsened by increasingly sophisticated ad and listing processes that complicate online research attempts even further.
To overcome these setbacks, due diligence best practices require the full consideration of all publicly available online sources. Automated tools make this possible by allowing organisations to immediately and effortlessly scour millions of online data sources. This increases the likelihood of far-reaching due diligence insights and true donor understanding.
Key Takeaways:
- Failing to comprehensively research publicly available data sources helps donors to hide misdeeds.
- Due diligence processes that lack scope or resources stop you from accounting for critical and available information.
- An automated due diligence platform is capable of drawing and delivering insights between multiple sources of publicly available online data.

2. Learn about their network
In addition to helping develop a comprehensive profile of existing and prospective donors, donor due diligence has to provide a wide overview of their networks. Negative associations that could cause reputational harm should especially be investigated and accounted for. Positive network connections that contain future donor prospects also prove lucrative when identified early on.
With that said, conducting due diligence that’s far-reaching enough to provide these multiple levels of actionable insights can take days, or even weeks, when done manually. This leaves many nonprofits struggling to gain a strong idea of networks and failing to utilise donor databases at a productive pace.
These platforms further enhance the speed and agility of due diligence by being able to provide comprehensive, categorised reports that can be shared with anyone, whether internally or externally. The full understanding this provides makes it possible to both identify viable donors and make informed choices about which to pursue.
Key Takeaways:
- Publicly available online data enables both due diligence and an understanding of broader donor networks.
- Information on a donor’s connections uncovers negative associations and identifies potential donor prospects for growth.
- Automated due diligence discovers all publicly known connections so that you can choose which to pursue.
3. Deepen your conversations
Though typically used to identify and prevent reputational risk, donor due diligence can also be used to develop full donor profiles and understanding. By providing crucial insights that deepen conversations, this increases the likelihood of positive and lasting relationships. This is crucial for securing ongoing funding considering the wealth of charities, universities, and nonprofits all seeking donor support of this nature.
In-depth due diligence that considers information across all available sources adds to all facets of donor profiles including preferences, activities, and priorities. By accessing this information, nonprofits can tailor more effective and lucrative donor interactions. Developing this understanding early on in donor relationships helps secure funding and ensures reliability for ongoing funding.
Manual processes that take time and energy can prevent the speed and agility of this and even cause lasting damage as opportunities are not taken up swiftly enough. While an automated due diligence platform plays another part in solving this, it should be noted that these platforms don’t necessarily replace manual teams. Rather, the level of detail they provide and efficiency at which they work can enable said teams to redirect their efforts elsewhere, ideally through actually having these donor-nonprofit conversations.
Key Takeaways:
- Looking beyond financial needs is the best way for organisations to build productive donor connections in the long run.
- Donor due diligence profiles are crucial for deepening donor conversations from the start.
- The expanse and immediacy of information derived from automated due diligence platforms are crucial for deepening donor relationships at any stage.
4. Use technology to stay ahead
As well as limiting access to donor understanding, manual due diligence processes can cost organisations significant time and money. These setbacks can impact the feasibility of donor connections, as well as opportunities for donor prospecting in the future. Technology that speeds and simplifies these processes cuts through the noise to save on resources and enhance efficiency.
Automated due diligence platforms that are designed and primed to adapt to changes are the best solutions to ensure long lasting productivity for all organisations. The rapid pace at which these platforms function without having to sacrifice detail make them prime additions to nonprofit work across the board, including donor due diligence.
This has not gone unnoticed as organisations have long recognised the need to take up technology to continue to survive, let alone expand, in today’s day and age. The pandemic, in particular, has led to better use of technology across the nonprofit sector, with 49% of charities crediting this period with driving significant digital improvements. While this does enable more fruitful due diligence trends across the board, this also spells increased competition for nonprofits. It is more prudent than ever for organisations that have yet to utilise the advantages of automated due diligence to understand what it delivers and why they must take it up.
In terms of due diligence, this means adapting to online landscapes and working around changes such as complex ads that can leave publicly available data hidden. As global operations become the norm, technology’s ability to conduct thorough due diligence with multilingual capabilities is also imperative. In each instance, automation and continual software upgrades offer the best security against outdated processes. This ensures due diligence that is always comprehensive, as well as the ability to adapt to even sudden changes as they happen.
Key Takeaways:
- The pandemic enabled charities to realise the benefits of technology in their work processes.
- Organisations looking to keep up with evolving challenges need adaptable technological tools such as Donor research tools to help them do that.
- Automated platforms in-built with advanced technology and constant upgrades offer the best opportunities for due diligence evolutions.
Prime your donor due diligence for the future
Nonprofits that rely on the generosity of the general public are both legally and ethically obliged to conduct extensive donor due diligence. As well as avoiding negative associations, this ensures the best foundations for ongoing donor relationships and networks.
As online data continues to grow, due diligence best practices need to cross-match full data sets for insights. This is both time-consuming and costly to achieve with manual processes alone, but automated due diligence solutions can fill the gaps, as well as add to them.
Organisations that wish to protect themselves as well as enable growth will heavily benefit from automated platforms like Xapien that expand and adapt due diligence practices in line with the information available from ever-expanding online data. Xapien has the capability to automatically assess and cross-reference vast amounts of publicly available online data to deliver the information that is relevant to a few provided terms of context. Additional functions such as face matching, translation and pulling hidden media that would otherwise go unconsidered ensures that you are getting the full picture about your subject and can make informed decisions.
When it comes to fostering better donor due diligence — and donorships — in 2023 and beyond, automated platforms are the way to go. To see the benefits of taking up the best due diligence practices possible for yourself, book a demo with Xapien.

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